Iran fighting 'smart economic war': Ahmadinejad

Iran is engaged in a "smart economic war" with Western powers whose sanctions against its nuclear programme are hurting some Iranians, President Mahmoud Ahmadinejad said on Saturday.

"Targeted sanctions, which the enemies say are supposed to be crippling, have led to a drop in our oil" sales, Ahmadinejad said in a live interview on state television, referring to an oil embargo imposed by the European Union.

"They do not even let us transfer the oil money," he said. "They thought Iran's economy would break down, but it did not."

"Iran is engaged in a smart economic war with the enemy," he said.

The EU measure, which came into effect in July, ended European purchases of Iranian crude, and has since decreased Tehran's oil exports to its Asian customers from between 10 to 30 percent.

According to the International Energy Agency, Iranian exports in November were estimated at 1.3 million barrels per day, down from nearly 2.3 million last year.

Ahmadinejad said his government had "so far managed to control" the effects of sanctions on the economy but admitted that "heavy pressure had been exerted on some Iranians because of sanctions."

He did not elaborate on how Iran was fighting off sanctions for fear the methods would be found by Western powers trying to goad Iran back to the negotiating table over its nuclear ambitions.

"I cannot say what heavy pressure the enemy has imposed, and how we are dealing with them."

"We have so far managed to control this blow, and it hasn't turned out the way they predicted," he said.

Ahmadinejad has faced increasingly scrutiny at home for economic woes, including the collapse of the national currency, which lost more than two-thirds of its value in a 20-day span starting in late September.

Iran's economy is struggling to cope with the gradual tightening of sanctions by the United States and the European Union over the past two years.

The sanctions have also targeted Iran's access to the global banking system, slowing its economy, accelerating inflation and boosting the ranks of the jobless.

Ahmadinejad was speaking to report on his government's implementation two years ago of a controversial plan to cut subsidies on food and energy and redistribute it in form of social assistance.

The plan to generate tens of billions of dollars in additional revenues for his government has been criticised by his opponents, who blame it partially for Iran's runaway inflation.

Ahmadinejad said his government had devised schemes to diffuse the effects of Western sanctions in the "long-term."

"We have prepared long-term plans to decrease dependency on the oil-generated money. We will not allow them to use economic measures as a tool for putting pressure on us anymore," he said.

He said without elaborating that Iran was to "increase its non-oil exports."

His remarks came as Western powers engaging Iran to resolve a years-long dispute over its nuclear programme are pressuring Tehran to return to the negotiating table.

Iran has yet to respond to offers of renewed negotiations with the so-called P5+1 group, consisting of the five permanent members of the UN Security Council plus Germany.

Iran insists its programme of uranium enrichment is for purely peaceful purposes, and denies Western and Israeli allegations that it wants to manufacture nuclear weapons.

In addition to US and EU measures, Iran is also under four rounds of Security Council sanctions.